Morning Commentary: New Perenti 7½% notes trade to premium; cash outflows continue

By Paul A. Harris

Portland, Ore., April 19 – Junk opened unchanged on Friday morning, according to a bond trader in New York.

With the Dow Jones industrial average up 0.3% at midmorning, the iShares iBoxx $ High Yield Corporate Bd (HYG) share price was 0.19% better, up 15 cents, at $75.99.

Among recent issues, the new Perenti Finance Pty Ltd. 7½% senior notes due 2029 (BB/BB+) were active Friday morning, trading above new issue price at par 3/8 bid, par 7/8 offered.

The $350 million issue priced at par in a Thursday blowout that had the Australia-based mining group’s new unsecured notes playing to demand in excess of $2 billion, sources said.

Elsewhere, the Six Flags Entertainment Corp./Six Flags Theme Parks Inc. 6 5/8% senior secured notes due May 2032 (Ba2/BB) were somewhat active on Friday morning, according to a trader, who spotted them wrapped around the new issue price.

The $850 million issue came Thursday at par.

The week’s lowest-rated deal, Tutor Perini Corp.’s 11 7/8% senior notes due April 2029 (Caa1/CCC+), was trading well above issue price on Friday morning at 98¾ bid, 99½ offered, the trader said.

The $400 million issue priced Wednesday at 97.71 to yield 12½%.

The dollar-denominated primary market sat idle on Friday morning.

In the active euro-denominated new issue market, France-based engineering group Fives was set to price its €425 million offering of Nova Alexandre III SAS five-year senior secured floating-rate notes (B3/B/B+) ahead of the weekend.

The deal is talked with a 525 basis points spread to Euribor, to price in the 99 area (98.75 to 99.25).

Fund flows

The dedicated high-yield bond funds sustained $286 million of net daily cash outflows on Thursday, according to a market source.

High-yield ETFs had $200 million of outflows on the day.

Actively managed high-yield funds sustained $86 million of outflows on Thursday, the source said.

News of Thursday’s daily flows follows a Thursday afternoon report that the combined funds had $3.7 billion of net outflows in the week to the Wednesday, April 17 close, according to sources.

That was the largest weekly outflow since March 2023, and the seventh outflow in the past 10 weeks, according to the market source.

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